What was agreed by the OPEC countries?

О чем договорились страны ОПЕК?

Negotiations OPEC in Vienna, which lasted more than six hours and was nearly broken due to internal differences, ended in the night from Thursday to Friday. Ministers generally supported the recommendation of the Ministerial monitoring Committee of OPEC to increase the quota by reducing production from 1.2 million barrels/day to 1.7 million barrels/day (b/d), however, the question of personal quotas will be decided at the negotiations in the format of OPEC+ on Friday. “We have reached agreement with all members of OPEC. We are always among the OPEC members have agreed”, – said the Minister of energy of Saudi Arabia Abdul Aziz bin Salman, leaving the Secretariat building at almost midnight. He also described the meeting as “absolutely successful”, but noted that the agreement reached on Thursday evening the agreement with the OPEC Ministers will discuss at a meeting with Ministers in the format of OPEC+, which will take place on Friday. The proposal to strengthen the reduction of production by 0.5 million b/d announced a Ministerial monitoring Committee, which met in Vienna in the first half of the day chaired by Russia and Saudi Arabia. According to Russian energy Minister Alexander Novak, the need to strengthen the restrictions associated with a characteristic for the winter season slowdown in oil demand. The Committee proposed to increase the quota until the end of the agreement, i.e. until March 2020. In fact, however, replacement figures little difference. In October a plan to reduce production was exceeded by 42%, thanks to the efforts of Saudi Arabia and other Gulf States. Thus, the Alliance has cut production by 1.7 million b/d to October 2018, taken for the base. And although the overall indicator of the health of a transaction, within the Alliance, not all members comply with accepted arrangements. So, Iraq is the second largest oil producer in the organization under the terms of the agreement must reduce its production by 141 thousand b/c to 4.5 million b/c. However, according to the IEA, in September his production was at the level of 4.77 million b/d in October – 4,72 million b/ d. Nigeria under the terms of the transaction was to reduce production by 53 thousand b/d up to 1.68 million b/d in September, however, its production was 1.8 million b/d in October to 1.72 million b/d. According to sources TASS, Saudi Arabia at the meeting demanded from a number of countries, poorly performing its obligations for a long time to come finally to the full implementation of the agreements, but that promise failed to reflect the increased limits. The main disputes were related to the implementation of individual quotas, said the Agency interlocutor. According to the regulations of the meeting, after the decision was taken by OPEC, they are joined by the country’s “non-OPEC” involved in the agreement. The meeting is scheduled on Friday in Vienna. However, given that the negotiating table is not already 11, and 24 countries, to predict the outcome becomes even harder. A discussion of Ministers remains the most important – as the change in the overall quota and the exclusion from the calculation of gas condensate will affect individual levels of production. According to Novak, OPEC agreed to remove condensate (liquid hydrocarbon, often in the statistics production is taken into account along with oil) from a quota of Russia and all the “non-OPEC”. The share of condensate in Russian oil output reaches 7-8%, he said. Russia can’t cut production for a specified 228 thousand b/d to October 2018 from August. This hinders the growth of the alleged extraction of the condensate, due to the launch of new gas projects, explained Novak. If the condensate be removed from the quota agreements are executed on 100%, the Minister said. At the same time, the question of the extension of the agreement in 2020 after March, was postponed to the spring. The monitoring Committee of the OPEC+ plans to return to it in early March.

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